Question

Swifty Corporation has the following data related to an item of inventory: Inventory, March 1 450...

Swifty Corporation has the following data related to an item of inventory:

Inventory, March 1 450 units @ $1.90
Purchase, March 7 1430 units @ $2.00
Purchase, March 16 330 units @ $2.05
Inventory, March 31 580 units


The value assigned to ending inventory if Swifty uses LIFO is

$1102.
$1177.
$1187.
$1115.
Business   Accounting   
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Homework Answers

Answer #1

As per LIFO method , inventory purchase later, is cherged to cost first. Thus, ending inventory consists of the units purchased earlier.

In the given case, 580 units of the ending inventory will consist of 450 units from March 1 inventory and 130 units purchased on March 7

calculation of Cost of ending inventory

date Units Unit cost Total cost
March 1 450 $1.90 $855
March 7 130 $2 $260
Total 580 $1,115

Cost of ending inventory = $1,115

Fourth option is correct

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